Experiments and theoretical work investigate basic mechanisms of human perceptual categorization. The working hypothesis is that both the application of rules and the retrieval of instances from memory underlie the human ability to classify objects into different categories. Rule- based processes are assumed to compete against instance-based processes. Early in category learning, rule-based processes dominate (if rules have been provided or can be induced). With more experience classifying items, instance-based processes come to dominate as more information about specific instances have been stored in memory. When rules are simply unavailable, instance-based processes are used entirely throughout learning. This theoretical framework motivates a series of proposed studies. This framework will be contrasted with other proposed theories of perceptual categorization. The first study investigates the relationship between perceptual categorization and recognition memory in normal and memory-impaired individuals (both simulated amnesiacs and Alzheimer's Disease patients will be tested). Instance-based models assume an empirical relationship between categorization and recognition, while multiple memory-system theories do not. The second study specifically tests for shifts from rule-based to instance-based processes in categorization as a function of learning using stimuli and category structures that allow the formation of rules. Subjects will be trained to classify items into categories and will be tested on their generalizations to new items at various points in learning to gauge the types of strategies they are employing. Both empirical studies and theoretical modeling work are proposed to provide converging evidence for categorization strategy shifts. The third study develops and tests a new model of perceptual categorization that combines an instance-based memory-retrieval mechanism with a diffusion process to make classification decisions. Theoretical extensions of this new model are also proposed. Long-term mental health implications of this research stem from a broadened understanding of basic mechanisms of perceptual categorization, a fundamental cognitive process. It can be argued that understanding causes of cognitive deficits in mental disorders requires a complete understanding of normal cognition. Proposed studies with AD patients should lead to important insights into the cognitive deficits surrounding this debilitating and widespread disease.